Connecticut isn't ready to prosper; and stop taxing electricity

When federal census data showed Connecticut's population increasing by about 57,000 in 2021 and 2022, Gov. Ned Lamont construed it as great news, evidence of the state's prosperity under his administration, a remarkable contrast with the population losses of nearby states.But the other day the U.S. Census Bureau acknowledged that the population increase report was a mistake and that Connecticut probably experienced a population loss of 13,500 during that period.In a way this may be construed as great too.For the state has a severe shortage of housing, home prices and rents have been soaring, and homelessness is rising. Experts say the state needs at least 100,000 more housing units just for its current population to be able to live decently. If the state really had gained 57,000 people, it would be under much greater strain.Connecticut isn't prepared for greater prosperity, and more strain is promised by the increased military contracting coming into the state, for which thousands of new workers are needed.Even if the national economy is entering a recession, as it seems to be, Connecticut still will have thousands of inadequately housed people.Equating construction of inexpensive housing with poverty because of the mess the state has made of its cities, Connecticut has been slow to recognize that its housing policy — unfriendly if not hostile to new housing — has been a disaster too.But the Lamont administration has taken the hint and is proceeding with state government incentives for housing construction. Hartford and New Haven are encouraging apartments and condominiums and are showing that city living can be attractive, and a few suburbs are viewing housing proposals more favorably than usual.It's far from enough but it's a start. If housing initiatives continue for a few more years and state government discourages exclusive zoning and controls spending and taxes, maybe even accurate census data will start showing that more people want to move to Connecticut than leave it for lower-taxed states with milder winters.Connecticut has nearly the highest electric rates in the country, and the big increases imposed last month are painful reminders that the state will have to reduce rates if it would increase its prosperity and population — or even just maintain its population.The latest rate increases have two major causes: the decision by the governor and General Assembly to guarantee purchase of the electricity generated by the Millstone nuclear power plant in Waterford as a matter of Connecticut's energy security; and second, the "public benefits" charges that long have been largely hidden in customer electric bills, essentially sales taxes to finance state government programs having little if anything to do with generation and delivery of electricity.Among the "public benefits" charges is one by which people who pay their electric bills are required to pay as well for people who don't pay but who under state law can't be disconnected during much of the year. Since this charge is a welfare expense, it should be borne by taxpayers generally, not by electricity users particularly.Indeed, there is no good reason to charge electricity users particularly for any of the "public benefits" hidden in their bills. Insofar as electricity is a necessity of life, taxing it is no more justified than taxing food and medicine would be.The real justification for financing the "public benefits" from a de facto sales tax on electricity is that state legislators and governors have liked obscuring the costs of those "benefits" and deceiving the public into thinking that the big, bad electric companies are overcharging. By some estimates 20% of the cost of electricity for a typical Connecticut resident results from non-electrical "public benefits" charges.Members of the General Assembly's Republican minority have been making an issue of this and fortunately have begun pressing it harder. "Public benefits" charges on electricity bills should be eliminated, along with the "public benefits" themselves, or else their costs should be recovered through general taxation or spending cuts elsewhere.Now who wants to specify the tax increases or spending cuts necessary to get rid of the "public benefits" charges?Chris Powell has written about Connecticut government and politics for many years. He can be reached at CPowell@cox.net.